B-121478, AUGUST 4, 1955, 35 COMP. GEN. 73
Highlights
LEASES - RENEWAL - ELECTRICITY AND OTHER BUILDING SERVICES - AMBIGUOUS PROVISIONS - INTENTION OF PARTIES WHERE THE RENEWAL PROVISION OF A LEASE WAS AMBIGUOUS AS TO WHETHER THE RENT FOR THE RENEWAL PERIOD INCLUDED UTILITIES AND JANITOR SERVICES FURNISHED BY THE LESSOR. 1955: REFERENCE IS MADE TO YOUR LETTERS OF FEBRUARY 28 AND JUNE 24. WAS PREVIOUSLY CONSIDERED IN DECISION OF OCTOBER 27. A COPY OF WHICH DECISION APPEARS TO HAVE BEEN FURNISHED YOUR COMPANY. IT WAS CONCLUDED THAT THERE WAS NO LEGAL BASIS FOR PAYING YOUR COMPANY $9. THAT AT THE TIME THE ORIGINAL LEASE WAS SIGNED THE PARTIES THERETO AGREED THAT THE JANITOR SERVICES AND UTILITIES WOULD NOT BE INCLUDED IN THE RENTAL IF COSTS REMAINED HIGH OR CONTINUED TO RISE.
B-121478, AUGUST 4, 1955, 35 COMP. GEN. 73
LEASES - RENEWAL - ELECTRICITY AND OTHER BUILDING SERVICES - AMBIGUOUS PROVISIONS - INTENTION OF PARTIES WHERE THE RENEWAL PROVISION OF A LEASE WAS AMBIGUOUS AS TO WHETHER THE RENT FOR THE RENEWAL PERIOD INCLUDED UTILITIES AND JANITOR SERVICES FURNISHED BY THE LESSOR, REFERENCE MAY BE MADE TO A LETTER WHICH ACCOMPANIED THE BID, AND THE INTENT EXPRESSED IN THIS LETTER WHICH INDICATED A RIGHT TO RENEW UNDER THE TERMS AND CONDITIONS OF THE ORIGINAL LEASE MUST PREVAIL OVER A CONTRARY INTENT SUPPORTED ONLY BY THE UNSUBSTANTIATED RECOLLECTION OF AN ORAL AGREEMENT MADE MORE THAN SIX YEARS AGO.
TO CRUM-1MCKINNON BUILDING COMPANY, AUGUST 4, 1955:
REFERENCE IS MADE TO YOUR LETTERS OF FEBRUARY 28 AND JUNE 24, 1955, CONCERNING YOUR CLAIM FOR UTILITIES AND JANITOR SERVICES FURNISHED DURING THE PERIOD JULY 1954 THROUGH JUNE 1955 TO THE BUILDING OCCUPIED UNDER LEASE NO. GS-10B-160 (FORMERLY I-3L-119), DATED OCTOBER 29, 1948, AS RENEWED. ESSENTIALLY THE CLAIM INVOLVES THE CONSTRUCTION OF THE RENEWAL PROVISION IN PARAGRAPH 7 OF THE LEASE.
THE MATTER OF THE GOVERNMENT'S LIABILITY FOR THE COST OF SPECIAL SERVICES FOR THE RENEWAL TERM BEGINNING JULY 1, 1954, WAS PREVIOUSLY CONSIDERED IN DECISION OF OCTOBER 27, 1954, B-121478, TO THE ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION, A COPY OF WHICH DECISION APPEARS TO HAVE BEEN FURNISHED YOUR COMPANY. THE CITED DECISION HELD THAT THE RENEWAL OF THE LEASE OBLIGATED YOUR COMPANY TO FURNISH THE BUILDING TO THE GOVERNMENT FOR AN ADDITIONAL FIVE-YEAR TERM BEGINNING JULY 1, 1954, UNDER THE SAME TERMS AND CONDITIONS OF THE ORIGINAL LEASE (INCLUDING THE SPECIAL SERVICES SPECIFIED IN PARAGRAPH 6), EXCEPT FOR A REDUCTION OF TEN PERCENT IN THE ANNUAL RENTAL RATE OF $31,500. THEREFORE, IT WAS CONCLUDED THAT THERE WAS NO LEGAL BASIS FOR PAYING YOUR COMPANY $9,150 PER ANNUM FOR SPECIAL SERVICES FURNISHED BY YOUR COMPANY FOR THE RENEWAL TERM BEGINNING JULY 1, 1954.
IN YOUR EARLIER LETTER OF FEBRUARY 3, 1955, YOU CONTEND THAT THE DELETION OF PARAGRAPH 5, THE RENEWAL CLAUSE, FROM THE REGULAR PRINTED LEASE FORM AND THE INSERTION IN PARAGRAPH 7 OF A PROVISION GIVING THE LESSEE AN OPTION TO RENT FOR A FURTHER TERM WITHOUT REFERENCE TO SERVICES TO BE FURNISHED INDICATES AN INTENTION THAT THE SERVICES NOT BE INCLUDED IN THE RENTAL FOR THE ADDITIONAL PERIOD. YOU CONTEND, ALSO, IN YOUR LETTER OF FEBRUARY 28, 1955, THAT AT THE TIME THE ORIGINAL LEASE WAS SIGNED THE PARTIES THERETO AGREED THAT THE JANITOR SERVICES AND UTILITIES WOULD NOT BE INCLUDED IN THE RENTAL IF COSTS REMAINED HIGH OR CONTINUED TO RISE.
IT IS A GENERAL RULE OF LAW THAT EXTRINSIC EVIDENCE IS INADMISSIBLE TO VARY THE TERMS OF A WRITTEN LEASE. HOWEVER, PAROLE AND OTHER EXTRINSIC EVIDENCE MAY BE ADMITTED TO CLARIFY AN AMBIGUOUS PROVISION OF A LEASE. WILLIAMS POCAHONTAS COAL CO. V. BERWIND LAND CO., 76 F.2D 319 ( CERT. DEN. 296 U.S. 610); CINCINNATI UNDERWRITERS AGENCY CO. V. THOMAS J. EMERY MEMORIAL, 88 F.2D506 ( CERT. DEN. 302 U.S. 696); COHN V. KRAMER, 124 F.2D 791. THUS, A LETTER WRITTEN PRIOR TO THE LEASE MAY BE USED TO CLARIFY THE AMBIGUITY IN THE LEASE. WILLIAMS POCAHONTAS COAL CO. V. BERWIND LAND CO., SUPRA.
CLEARLY, THE RENEWAL PROVISION OF THE LEASE WAS AMBIGUOUS. THIS WAS RECOGNIZED IN A SIMILAR CASE INVOLVING THE FRASER LEASE, B-106578, AUGUST 29, 1952, WHERE RESORT WAS HAD TO THE INSTRUCTIONS FOR COMPLETING THE LEASE TO CLARIFY THE AMBIGUOUS RENEWAL PROVISION. IT IS, THEREFORE, APPROPRIATE TO REFER TO THE LETTER OF OCTOBER 28, 1948, FROM YOUR PREDECESSORS IN INTEREST WHICH ACCOMPANIED THEIR BID. THAT LETTER STATED IN PART:
WE WILL FURNISH ALL JANITORIAL SERVICE AND SUPPLIES WITH THE EXCEPTION THAT THE LESSEE FURNISH TOILET PAPER, HAND TOWELS, SOAP AND LIGHT BULBS.
WE WILL DO ALL THE ABOVE IN EXCHANGE FOR AN ANNUAL RENTAL ON A FIVE YEAR NONREVOCABLE LEASE OF $31,500. WE WILL ALSO ENTER INTO AN OPTION FOR RENEWAL OF THE LEASE FOR FIVE ADDITIONAL YEARS WITH A TEN PERCENT REDUCTION IN RENTAL.
WHERE A LESSEE IS GRANTED THE PRIVILEGE OF RENEWING THE LEASE FOR ADDITIONAL YEARS HE IS ENTITLED TO A RENEWAL UPON THE SAME TERMS AND CONDITIONS AS THE ORIGINAL LEASE. MILLER V. CLEMONS, 276 S.W.2D 650; CUMMINGS V. RYTTING, 207 P.2D 804.
THE TERMS OF THE LETTER OF OCTOBER 28, 1948, CLEARLY INDICATE THAT YOUR ASSIGNORS CONTEMPLATED A RENEWAL UNDER THE TERMS AND CONDITIONS OF THE ORIGINAL LEASE. YOUR REPORT OF THE ORAL UNDERSTANDING ARRIVED AT DURING THE NEGOTIATIONS PRECEDING THE ORIGINAL LEASE BETWEEN YOUR ASSIGNORS AND THE GOVERNMENT'S AGENT TO THE EFFECT THAT UTILITIES AND JANITORIAL SERVICES WOULD BE IN ADDITION TO THE RENTAL STIPULATED FOR THE RENEWAL PERIOD WOULD INDICATE A DIFFERENT INTENTION. HOWEVER, THE INTENT INDICATED IN THE SIGNED LETTER WHICH IS A PART OF THE RECORD MUST PREVAIL OVER CONTRARY INTENT SUPPORTED ONLY BY THE UNSUBSTANTIATED RECOLLECTION OF AN ORAL AGREEMENT MADE MORE THAN SIX YEARS AGO.